High Court Orders Rethink Of $9.7M Award After TransUnion

The Supreme Court on Monday signaled to the lower courts that they need to seriously consider the impact of TransUnion LLC v. Ramirez, 594 U.S. ___ (2021) when addressing claims for statutory violations that do not result in any injury to the plaintiffs.

In 2017, a trial court certified a class of thousands of individuals who received a mortgage with Quicken Loans (now called Rocket Mortgage) from 2004 to 2009, and granted summary judgment in favor of those class members.  The result was a multimillion-dollar judgment against Quicken Loans. And the trial court reached that result despite the Supreme Court’s 2016 ruling in Spokeo v. Robins, holding that a bare procedural violation is insufficient to demonstrate a “concrete and particularized” injury. 

On Monday, however, the United State Supreme Court undid the judgment and called into question the viability of plaintiffs’ entire case in a mere two sentences:

The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Fourth Circuit for further consideration in light of TransUnion LLC v. Ramirez, 594 U.S. ___ (2021).

Rocket Mortg., LLC v. Alig, 2022 U.S. LEXIS 156, *1 (Jan. 10, 2022).

As we previously reported, in TransUnion v. Ramirez, the Supreme Court applied Spokeo in the class action context and clarified that (1) a concrete injury is a “physical, monetary, or cognizable intangible harm traditionally recognized as providing a basis for a lawsuit in American courts”; and (2) that the “material risk of harm” alone is typically insufficient to constitute a concrete injury.  Leveraging that decision, Quicken Loans petitioned the Supreme Court to review the Fourth Circuit’s ruling upholding, in large part, the trial court’s almost $10 million judgment and class certification decision.  Quicken Loans argued that, because a significant portion of the class lacked concrete harm, pursuant to TransUnion, the judgment and certification order should be vacated.

Indeed, in its order, the Fourth Circuit had acknowledged that there was no evidence that Quicken Loans’ practices caused any harm to the unnamed class members.  Instead, the circuit court concluded that Quicken Loans’ conduct created the risk of harm to class members, and found the risk sufficient for Article III standing for the entire class.

But that wasn’t enough for the Supreme Court, which sent the case back to the Fourth Circuit for reconsideration. The High Court’s terse order in Quicken Loans solidifies that the existence of a significant number of unharmed class members can be a hurdle to class certification.  What constitutes a “significant number,” however, remains to be clarified.  Stay tuned for an update when the Fourth Circuit issues a new ruling on remand.